What digital transformation teaches finance leaders

Without a bell or intercom in sight, the doors of Roche’s Hong Kong office opened automatically. Two touch screens were waiting for visitors to input the names of the executives they planned to meet.

In less than two minutes, Tin Ha, CPA (Australia), Roche’s director of finance and operations, appeared, having received a visitor notification from his smartphone.

“This visitor registration tool and other new technologies, including those used by finance, are part of a larger digital transformation initiative in the entire Hong Kong office,” Ha said, as he moved to a meeting room in the office, which has been in use for less than a month.

Having been at the pharmaceutical company for seven years, Ha started to contribute to its digital transformation two and a half years ago when he relocated to Hong Kong from another Roche office.

Ha, who leads a finance team with 13 people, has also been receiving extra help from a robot named AIDA. A cloud-based robot, AIDA is equipped with technologies including robotic process automation (RPA), natural language processing, chatbot, and image recognition, he said. Accessible via smartphones and laptops, AIDA currently processes invoices for the finance unit.

“The image recognition function allows AIDA to read invoices and contracts,” said Ha. “This robot also validates prices.”

He said that the work done by AIDA has freed staff to work on other things and that the company’s employees are feeling increasingly at ease with working in tandem with a robot. Outside of finance, AIDA also automates processing of customers’ orders.

Changing cultures and mindsets

Despite its being an officewide initiative with much support in this case, making the shift to a digitalised workplace is not without challenges. According to Ha, the major obstacle is the human element.

“Digital transformation requires a mindset change,” he said. “People by default resist it.”

Not only do employees need to change, but management also has to adopt a new approach, especially if it is more used to a top-down strategy.

“The technologies you implement are new, and they will result in new ways of doing things as well,” Ha said. “That requires lots of learning for both management and employees. In a situation like this, it’s better for management to resist too much intervention and simply allow people to fail and learn.”

Jacqueline Chan Nap-Shan, CPA (Hong Kong), CPA (Australia), managing director and CFO at DBS Bank Hong Kong, agrees that culture and mindset are the major challenges.

The finance transformation she went through was also part of an initiative spanning the entire organisation that executed a strategic shift to become “digital to the core”. The initiative covered all systems, platforms, people, the bank’s operating model, and a mandate to embed itself into the customer journey, Chan said. It required people from all business units and support functions to change how they worked.

As a CFO, Chan was conscious of the need to turn herself into a leader for the digital age, along with transforming the finance team.

The transformation allowed finance to replace old and complex systems with new technologies and stakeholders to access the right information for decision-making, she said. Finance also aimed to shorten the record-to-report cycles, catch up with the speed at which business is done, and build capabilities to enable better planning and financial projections through insightful analysis. The goal is to link itself with the rest of the bank to leverage resources and support from other departments.

Technologies deployed include data visualisation, which enhances the existing analytics tool and enables the creation of interactive business intelligence dashboards; RPA; and tools for detecting abnormalities to enhance risk and control management.

Do CFOs know what digital transformation involves?

At Hong Kong-headquartered business expansion services company Tricor Group, the finance function is using RPA to process accounts payable and looking at using the same technology for accounts receivable to improve the company’s credit control, said Group CFO and COO Wendy Wang.

The company, which operates out of 21 countries, is also exploring other technologies such as artificial intelligence, optical character recognition, and data analytics. According to Wang, the major challenge of digital transformation relates to CFOs’ awareness of issues and technologies’ potential.

While many CFOs understand the need for digital transformation and its possible impact on their companies and finance units, they might not be fully prepared for it, with only a partial understanding of the potential of available technologies.

“This results in difficulties when CFOs try to identify the right relevant and future-proof technologies for finance,” Wang said. “CFOs — while getting excited about new technologies — also need to be aware of the problems they try to solve with them.”

Ha agrees. “People must remember that the new ways of working that arise out of digital transformation will still need to take into account a company’s legacies, priorities, and short-term deliverables,” he said. “We don’t deploy new technologies because they are new but because they could make a company better.”

Tips from the top

Although the challenges that these finance leaders identify are likely to persist and be experienced by other CFOs, there are practical ways to tackle them. They have the following advice to address these issues and make digital transformation a success:

Keep learning, take risks, and dare to fail

“CFOs need a healthy dose of risk-taking and an openness to embrace new ideas, instead of relying on the tried and tested,” said Wang. “This means CFOs need to keep learning.”

Chan also emphasised the importance of being bold. “You will not see results if you don’t try in the first place,” she said. “But, remember, nobody will have all the answers, so it is important to quickly learn how to fail without finger pointing. The more often you fail fast, learn, and move on, the less likely it is that you’ll have to recover from big missteps.”

Identify the problems and key performance indicators

“CFOs must first identify the present and future problems that need solving before purchasing technologies,” Wang said.

Once the technology has been brought in, it is important to establish whether there is a demonstrable return on the investment. “CFOs need to identify key performance indicators and metrics for tracking and measuring via an analytics platform,” said Wang.

Communicate effectively

“To reduce uncertainties and build trust, CFOs must be ready to answer finance team members’ questions and share both successes and mistakes,” said Ha.

Wang concurs. “The importance of communication is never stressed enough,” she said. “Instead of making assumptions, team members need to communicate. There will be ups and downs during transformation, but communications and team spirit will help staff overcome challenges.” 

This includes enabling employees to feel secure enough to be honest and open, even when the news is not good. “People need to learn to deliver any bad news relating to a project’s progress, while leaders have to make it safe for them to do so and ensure there are no recriminations,” said Chan.

Build a bottom-up culture, and fill the workplace with entrepreneurial spirit

“Success comes from people taking ownership,” said Ha. “Therefore, digital transformation must be bottom-up instead of top-down.” Ha advises CFOs to start building such a culture by asking their teams guiding questions such as:

• How do you want to work in the longer-term future? A longer time frame is better than a short one because it helps people ditch many limiting thoughts.
• How will those new ways of working you imagined align with the company’s purpose? “The question helps employees connect technologies and purposes. Technology is nothing until it’s applicable to a purpose,” Ha said.
• What do you want to do with the time that technologies free up for you? This will help employees think about the new skills they want to develop.

Roche has a new technology-enabled open office where startups developing solutions for it come to work with the company’s employees. “This way, we allow our employees to get a feel of the entrepreneurial spirit of startups and encourage them to adopt their ways of thinking and doing things,” Ha said.

— Teresa Leung is a freelance writer based in Hong Kong. To comment on this article or to suggest an idea for another article, contact Alexis See Tho, an FM magazine associate editor, at Alexis.SeeTho@aicpa-cima.com.